EC201 Principles of Macroeconomics (Fall 2004)
Dr. J.E. Erkkila Office: South Hall, Room 310 Office Telephone: (906) 635-2108
Office Hours: MW 11-11:50, T 1-2:50, R 1-1:50 & by Appointment E-Mail: [email protected] FAX: (906) 635-2821
Course Objectives
Your purpose in taking this course is to learn macroeconomics. The emphasis is on learning to understand how the economy
works so that you can have a more successful & interesting life. This course focuses on the methodology of macroeconomics. It
includes problem solving, critical thinking and applications skills. Macroeconomic theory provides the framework in which you can learn
how to learn about the economy. Learning about the economy is a life-long adventure.
A knowledge of economics is good for you. It pays off in many ways. It protects you from making expensive mistakes. A good
understanding of the economy can make you wealthy. Learning economics requires a large investment of your time & effort. The payoff
is that by working at economics, you will develop an interest in it, appreciate its importance, understand how it affects you, & have fun.
Your career & your business will be heavily influenced by the macroeconomy, so it is in your interest to learn as much as possible.
Specific objectives are:
1. to learn modern Macroeconomic theory so that you become a skilled consumer of economic reporting by the media, with the
ability to evaluate it critically.
2. to learn how the economy & business interact.
3. to learn how to use the tools of macroeconomic theory so that you can analyze the impact of economic events including
government policy on business, the economy, & your life.
4. to learn the markets which comprise the macroeconomy.
Textbook: Karl E. Case and Ray C. Fair Principles of Economics Prentice Hall Publishing, 7TH. Edition, 2004.
Helpful Web Sites - There are many sites. Here are a few to get you started.
1., 2.
3., 4.
5., 6.
7., 8., 9., 10.
1. Emily Busk is the Supplemental Instructor (SI).
2. There is a Study Guide on reserve in the Library.
3. There is a Video called The Prime Time World of Macroeconomics on reserve in the Library.
Student Evaluation
There will be two term tests and quizzes (maybe some assignments) every week beginning the second week of classes, and
a final. Your grade is based on total points. Students, who have attended all classes and taken all tests and quizzes, shall receive a
grade no lower than that earned on the final exam. I reserve the right to alter calculated grades based on attendance and my
assessment of the student’s acquired knowledge
Tests – Oct. 20 and Nov. 17
Quizzes & Assignments
Final Exam
To Be Scheduled. Check
Total Points
Course Weight
100 Points
100 Points
100 Points
Grade ranges in percentages are: A+ 100-97, A 96-93, A- 92-90, B+ 89-87, B 86-83, B- 82-80 C+ 79-77, C 76-73, C- 72-70, D+ 6967, D 66-63, D- 62-60, F < 60
(Please Turn Over)
Make-Up Policy
The University policy is to allow students who are excused from class by a University Vice-President to make-up missed
work. .However, students are not excused from being prepared. For others, If you let me know in advance i.e. 24 hours., I willl do my
best to accommodate you but no promises.
Extra Work Policy
There are no extra work assignments.
Attendance Policy
I have one rule – DO NOT MISS ANY CLASSES. Attendance is taken every day. Research shows that grades and
attendance are positively correlated. Put simply, if you do not attend class, you should not expect to pass. . As adults, you are
free to make your own choices but you must also be prepared to accept the consequences.
Disability Statement In compliance with Lake Superior State University policy and equal access laws, disability-related
accommodations or services are available. Students who desire such services are to meet with the professor in a timely manner,
preferably the first week of class, to discuss their disability-related needs. Students will not receive services until they register with
the Resource Center for Students with Disabilities (RCSD). Proper registration will enable the RCSD to verify the disability and
determine reasonable academic accommodations. RCSD is located in Library 101. The telephone number is 635-2454.
State Standards met by this course
relate the balance of trade concepts to the import/export process
identify economic opportunity costs for making decisions
identify the factors of production that affect productivity
identify the monetary institutions and explain their roles in the U.S. and world economies
describe the types of competition and its role in the U.S. economy
Course Schedule
Schedule is Tentative & Subject to Change
(No Classes on Sep. 6 and 7- Labor Day, Nov. 24 and Nov. 26 - Thanksgiving)
Aug. 30
Sep. 1, 3
Sep. 8, 10, 13,
Sep. 17, 20, 22,
Ch 1 (Brief Survey), Ch. 2, Omit pp. 25 to top of 28.
Business Cycle Graph p. 386
GDP p. 391, Graph. p.387, Table p. 637
Inflation p. 379, Graph p. 388, Table p. 424
Unemployment Rate p. 415, Graph. p. 388, Table p. 416
(Participation Rate p. 415, Graph p.616, Table 416)
Interest Rate p. 499, p. 512-3
Gov’t Budget p. 464, Graphs pp. 465-6, 589-9 Table p. 582
Productivity 412, Graph p. 412, Table p. 634 & 638
Exchange Rate
Balance of Trade 666, Table p. 666
Ch 3
Introduction to Macro. Definition of
Macro Aggregates, Business Cycle p.
386. Production Possibility Frontier,
Economic Growth
Ch. 22
What Is Money? pp 475-77.
Money Measurement. pp 477-9.
Money Creation pp. 479-85
Federal Reserve System pp. 485-9
Control of Money Supply pp. 489-95
Demand for Money pp. 499-506
Interest Rate Determination pp. 506-9
Fed. Policy p. 509
Exchange Rate Determination
The Great Depression,
Economic Goals, GDP, Labor
Market, Inflation, Productivity
Sep. 24, 27
Ch. 23
Sep. 29, Oct. 1
Oct. 4, 6, 8, 11,
pp. 696-702
Chs. 17, 18, 19
Consumption Graph p. 615
Housing Investment Graph p. 616
Plant & Equipment Investment Graph p. 622
Inventory Investment Graph p. 623
Ch. 20
Oct. 15, 18
Oct. 20
Oct. 22, 25, 27,
Nov. 1, 3, 5, 8
Nov. 10, 13, 15
Nov. 17
Nov. 19, 22, 29,
Dec. 1, 3
Test 1
Ch. 20
Dec. 6
pp. 650-3
Dec. 8
Dec. 10
To Be
pp. 658-60
Ch. 30
Final Exam
Demand & Supply
The Model of the Goods & Services
Market Which Determines GDP in a
Closed Economy Called the
Aggregate Expenditure Model
AE Model Continued
Ch. 21 and parts of Ch. 16
Ch. 24
Test 2
Ch. 25, 27
The Government & Fiscal Policy
Monetary Policy
Aggregate Demand & Supply.
Stabilization Policy, Monetary and
Fiscal Policy, Deficit Targeting.
Equation of Exchange, Quantity
Theory of Money, & Inflation
Supply Side Economics
Long-Run Growth
Relationship of Course to Outcomes of the School of Business, Economics, ald Legal Studies
Outcome One: Graduates will demonstrate knowledge of macroeconomics, one of the business-core subjects. Graduates will know the
economic environment of business.
Outcome Three: Graduates will demonstrate skills in critical thinking.
Outcome Eight: Graduates will appreciate the work ethic.

EC201 Principles of Macroeconomics